Press release from Ship Finance International Limited October 17, 2007
Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), today announced that it is has agreed to sell the single hull VLCC Front Duchess to an unrelated third party for net sales proceeds of $54.5 million.
Delivery to the new owner is expected to take place in January/February 2008, and Ship Finance will receive a net amount of approximately $29.1 million after compensation of approximately $25.4 million to Frontline for the termination of the current charter.
At the end of January 2008 there will be $7.2 million in loans outstanding against the vessel, and the net cash effect to Ship Finance from the transaction is estimated to be approximately $21.9 million. The book profit is estimated to approximately $2.6 million, and will be recognized in the first quarter of 2008.
Following this sale, and excluding one vessel previously announced sold on hire/purchase terms, Ship Finance will have only 9 single hull crude oil tankers remaining in the fleet. This is down from 18 single hull vessels in 2006. Frontline has secured profitable sub-charters for seven of the vessels, and only two are traded in the spot market.
The reduction of the single hull tanker exposure is in line with the Company’s strategy of focusing on modern assets in various shipping and offshore segments. The cash proceeds from the sale is intended to be re-invested as equity contribution in new projects.
October 17, 2007
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
Contact Persons:
Lars Solbakken: Chief Executive Officer, Ship Finance Management AS
+47 2311 4006 / +47 9119 8844
Ole B. Hjertaker: Chief Financial Officer, Ship Finance Management AS
+47 2311 4011 / +47 9014 1243
About Ship Finance
Ship Finance is a major vessel owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings and announced acquisitions, Ship Finance has a fleet consisting of 71 vessels, including 37 crude oil tankers (VLCC and Suezmax), 8 oil/bulk/ore vessels, 13 container vessels, 3 dry bulk carriers, 2 jack-up drilling rigs and 5 offshore supply vessels and 3 seismic vessels. The fleet is one of the largest in the world with a total cargo capacity of more than 11 million dwt. and most of the vessels are employed on medium or long term charters.
More information can be found on the Company’s website: www.shipfinance.org
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Ship Finance management’s examination of historical operating trends. Although Ship Finance believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Ship Finance cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in this presentation include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC’s petroleum production levels and world wide oil consumption and storage, changes in the Company’s operating expenses including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission.